Investing Tips

How to be a Stay-At-Home Investor

how-tobe-astay-at-homeinvestor

Imagine yourself sitting in front of your computer for a couple of hours a day, reading and pressing a few buttons, all the while bringing in income and raking in a profit. It’s the sort of dream job that everyone thinks about. Here’s what you need to know to make your dream come true:

Investing is a job, so put in your hours! 

As a stay-at-home mom, I understand and know just how little (free) time I have aside from raising my 8-month son, taking care of stuff around the house and leaving some time for myself to de-compress. But if you are serious about accumulating money and growing your investment portfolio, then you’ll have to put in the work just as you would if you were working for someone else. You’ll essentially be investing money into a business that you run from home, making you into the mompreneur that you never thought you’d become.

Learn the Basics

Investing can be as simple or as complex as you make it. And just like anything else, to become a pro, you’ll need to pick up on the lingo and learn the tricks of the trade. The good news is: there are so many free resources, so take advantage. A good place to start is to check out the articles on Investopedia, but if you are already feeling overwhelmed by the information overload, take a deep breath and recognize that this is a process, a life-long process and it’s one step at a time.

Read the News 

It’s important to know what’s going on in the world and know what’s happening to the companies you are investing. That’ll give you a general sense of the macroeconomics landscape as well help you understand why a company may be reacting in a specific way. It’s always key to remember that companies may fluctuate, sometimes wildly, in the short-term, so keeping abreast to the current events, will allow you to make informed and educated decisions. Consider setting up a Google News alert to stay current with the news.

Read the Quarterly and Annual Reports

Every publicly traded company is required to release quarterly and annual reports that provides a snapshot of how the company is doing. It provides valuable information, such as the company’s profit and earnings estimate, balance sheet and management’s strategic plan for the coming year. Take the time to peruse the company’s website, scan the earnings call transcripts, and read the industry reports. Remember all this information is public, and it’s your job to dig up the deets and connect the dots.

Develop Your Circle of Competence

Warren Buffet has long been applying this strategy to his investments and you should too. The concept is simple: each of us, through experience or study, has build up knowledge in certain areas of the world. By investing in companies you already know in industries you understand, you greatly increase the odds of your making money on that investment. My advice: start with one competency that you think you have and try to improve it by adding knowledge (reading) and experience (research companies or talk to someone in that company or field).

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Get Out and Talk to People

You may be staying at home but investing doesn’t have to be a lonely journey. In fact, it’s extremely valuable to bounce around investment ideas with ex-colleagues or friends and see if they share similar sentiments. Perhaps you’ll find their insights provocative but valuable. Investing can be an emotional experience to some; don’t let it overpower you. Talking to different people can ground you and help you make an informed decision.

Be Prepared To Lose Money

It’s important to not to take yourself too seriously, laugh at your mistakes, but take the time to learn from them. Investing is a long-term game, so don’t let the little ripples make your fall off your horse. You don’t need to dwell on your failure, but take the time to analyze your mistakes, identify the reasons for your mistake, and commit to memory the lessons that will prevent you from making additional investment mistakes.

Bottom Line

Being a stay-at-home investor has its perks, but also has its risks. If you stay disciplined, you have the potential to make it big. Like exercising, long-term investing requires your persistence and patience. Just remember this: aggressive short-term strategies may work in the short-run, but it seldom endures.

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